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03.03.11

Elizabeth Warren's GOP Charm Offensive

The Beltway outsider known for harsh critiques of Wall Street is working her way through 87 new Republican House members to win support for her new consumer agency. Eleanor Clift and Daniel Stone on her bridge-building campaign.

She is a lightning rod on the right, the Harvard professor who championed the creation of a
Consumer Financial Protection Bureau. Now,
Elizabeth Warren is visiting with Republican freshmen in an effort to soften their animosity toward this expansion of government, which she now is turning into reality.

Beginning with the half dozen freshmen who serve on the House Financial Services Committee, Warren is methodically working her way through the GOP’s 87 new members, many of whom are among her harshest critics. They don’t buy her argument that Wall Street greed was at the core of the
financial collapse. [They blame such government-backed giants as Fannie Mae and Freddie Mac, along with the Community Reinvestment Bank, for intentionally making risky loans so people could buy homes even when they couldn’t afford the mortgage.]

Asked why she is seeking out these lawmakers, Warren said: “If I can reduce the hostility they feel towards the agency I'm building, that's why I'm there.”

The consumer agency that the Democratic Congress authorized and funded as part of last year’s financial reform law is scheduled to open for business on July 21. President Obama is expected to name an executive director to lead the agency, and Warren, now working as a White House adviser, would ordinarily be his first choice.

Whether she could win Senate confirmation is another matter. She’s having enough trouble getting appointments with key senators whose support she will need. But if not Warren, who? Given the GOP’s determination to hobble this new agency, whoever Obama names may fail to win Senate approval and could languish in limbo as the president’s term winds down.

The alternative is a
recess appointment, which would last through 2012. And if those are the terms of engagement, her supporters say, why not install Warren? She is still the best advocate Obama has for aiding the embattled middle class. Progressives are pushing Warren to run for the Senate in Massachusetts, challenging Republican
Scott Brown, and while she hasn’t publicly rejected the idea, she doesn’t seem drawn to a Senate candidacy.

What she cares about is helping give birth to this first-of-a-kind federal agency. Over the past three months, Warren has secured plum office space a half block west of the White House and launched a cool website with big fonts and animated video.

She has also made some pretty startling hiring decisions, including four former bankers from such financial giants as Morgan Stanley and Deutsche Bank. Given some of her hot rhetoric on cable news lambasting the banking industry while she was still at Harvard, you could say she went behind enemy lines for these hires. “To not hire people like that would be to deliberately blind ourselves,” she told The Daily Beast's Daniel Stone.

This is the latest in a series of administration efforts to reach out to the banking and business community after a high-profile falling out in 2009, when Obama openly bashed greedy bankers and pushed for a major federal stimulus over reduced corporate taxes. The president appointed
Bill Daley, a former JP Morgan Chase executive, to be his chief of staff, and visited the Chamber of Commerce in early February to mend fences.

Some of Warren’s fans on the left were initially puzzled, but she seems to have calmed their anxieties. “She’s simply showing that what she wants to do is have a productive conversation with the industry,” says Pat Garofalo, a financial policy analyst with the liberal Center for American Progress.